Toll Brothers (TOL) Tops Q2 EPS by 5c

(Updated)

Toll Brothers (NYSE: TOL) reported Q2 EPS of $0.51, $0.05 better than the analyst estimate of $0.46. Revenue for the quarter came in at $1.12 billion versus the consensus estimate of $1.04 billion.

"Subject to the caveats in our Statement on Forward-Looking Information included in this release, we offer the following limited guidance. We estimate unit backlog conversion for the third quarter at 30%. We are narrowing our previous full fiscal year guidance and now expect to deliver between 5,800 and 6,300 homes in FY 2016. We now believe the average price of deliveries for the full FY 2016 will be between $820,000 and $850,000 per home. We reiterate our expected gross margin (pre-interest and pre-impairment) for the full FY 2016 to be approximately 25.8% to 26.2%. We are updating our SG&A guidance to approximately 10.4% of revenues and our interest in cost of sales guidance to approximately 3.2% of revenues."

Robert I. Toll, executive chairman, stated: "We continue to believe the drivers are in place to sustain the current housing market's slow but steady growth. Interest rates remain low, the job picture continues to improve, home equity values are rising, supply remains constrained and the industry is still not building enough homes to meet the demand that current demographics imply are needed. Last week The Wall Street Journal cited a U.S. Census report that indicated suburban populations are on the rise, which is supportive of the new home market. Another U.S. Census report last Tuesday noted that single family housing permits had risen by 8% in April from one year ago. As millennials mature, studies indicate that their appetite for home ownership is consistent with past generations, which is encouraging for our industry."

The Company continues to project a full FY 2016 gross margin, excluding interest and write-downs, of between 25.8% and 26.2%. Interest in cost of sales is projected to be approximately 3.2% for FY 2016, compared to 3.4% in FY 2015.

For earnings history and earnings-related data on Toll Brothers (TOL) click here.

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